If a company failed to make the end-of-period adjustment to remove the amount earned from the Unearned Management Fees account,there would be:
A)An overstatement of net income
B)An overstatement of assets
C)An overstatement of liabilities
D)An overstatement of equity
E)An understatement of liabilities

Question

Quizplus · Accepted Answer

The Unearned Management Fees account is a liability account. If the company fails to adjust it by removing the amount earned, the liability will remain overstated.

If a Company Failed to Make the End-Of-Period Adjustment to Remove